Cotton Surges on Speculation China's Use to Climb; Orange Juice Advances
Cotton futures jumped to a four-week high on speculation that China, the world’s biggest buyer, will increase purchases from the U.S., the leading exporter.
“The market has been supported by tight global supplies and expectations of big purchases by China during leader Hu Jintao’s visit to the U.S.,” said Hiroyuki Kikukawa, the general manager of research at IDO Securities Co. in Tokyo.
The fiber has more than doubled in the past 12 months, and inventories monitored by ICE Futures U.S. have slumped 72 percent. Hu arrived in Washington on Jan. 18 for his first state visit, and China agreed today to buy $1.8 billion in soybeans from U.S. companies. Record U.S. agricultural exports are providing an unexpected boost for President Barack Obama.
Cotton futures for March delivery jumped by the exchange limit of 4 cents, or 2.7 percent, to close at $1.5294 a pound at 2:46 p.m. in New York, the highest since Dec. 23. The fiber rose to an intraday record of $1.5912 on Dec. 21.
“Some option traders pushed prices higher today,” said Mike Stevens, an independent trader in Mandeville, Louisiana.
Orange-juice futures for March delivery jumped 1 cent, or 0.6 percent, to $1.76 a pound. The price has climbed 7.6 percent this month.
Florida’s orange crop this year may fall to 132 million boxes, the second-smallest in two decades, following “the coldest December in recorded history,” Jerry Neff, a Bradenton, Florida, branch manager at Allendale Inc., a research company and brokerage, said yesterday.
Brazil is the biggest citrus producer, followed by Florida. A box of oranges weighs 90 pounds, or 41 kilograms.
To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
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